CANADA FX DEBT-C$ half cent weaker after U.S. GDP data disappoints

Thu Feb 28, 2013 9:46am EST

* C$ at C$1.0281 vs US$, or 97.27 U.S. cents
    * U.S. GDP data shows growth slowest since Q1 2011
    * Canada's current account deficit narrows to C$17.3 bln
    * Bond prices rise across the curve

    By Solarina Ho
    TORONTO, Feb 28 (Reuters) - The Canadian dollar was trading
near eight-month lows against the U.S. dollar on Thursday as
lackluster U.S. data and ongoing bearish sentiment kept the
currency under pressure.
    The currency weakened after data showed the U.S. economy,
the biggest single destination for Canadian exports, barely grew
during the fourth quarter. U.S. growth came in below what
economists had expected and slipped to the slowest rate since
the first quarter of 2011. 
    The U.S. data overshadowed news that Canada's current
account deficit narrowed in the fourth quarter of 2012 on
stronger exports of energy and food products. The C$17.3 billion
($16.85 billion) deficit was still slightly wider than the C$17
billion forecast. 
    "We saw a little bit of a relief rally yesterday, but it's
been quickly snuffed out. American GDP data, it's softer than
expected, and that calls into question the North American
recovery," said Adam Button, currency analyst at ForexLive in
Montreal.
    "The entirety of the Canadian dollar move in the last two
weeks hasn't been driven by one news headline or another. It's
been growing disappointment about the worldwide economy."
    At 9:35 a.m. (1435 GMT), the Canadian dollar was
trading at C$1.0281 versus the U.S. dollar, or 97.27 U.S. cents,
about half a cent weaker than Wednesday's North American close
at C$1.0230, or 97.75 U.S. cents.
    The Canadian dollar was broadly underperforming a basket of
major currencies.
    Canadian government bond prices were higher across the
curve, with the 2-year bond rising 1.5 Canadian cents
to yield 0.995 percent and the benchmark 10-year bond
 adding 21 Canadian cents to yield 1.841 percent.
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